CPF changes w.e.f. 1.1.2016
I refer to the new “Get a monthly allowance for life, with CPF LIFE!” (updated on 20 December 2015).
According to the CPF web site –
| Your monthly payout* for life from 65 | Retirement Account savings required at 55 | |
|---|---|---|
| If you own a property and choose to pledge your property. | $660 – $720 | Basic Retirement Sum (BRS)
$80,500
|
| If you do not own a property or choose not to pledge your property. | $1,220 – $1,320 | Full Retirement Sum (FRS)
$161,000
The FRS is 2 x BRS.
|
| If you wish to put more savings in CPF LIFE. | $1,770 – $1,920 | Enhanced Retirement Sum (ERS)#
$241,500
The ERS is 3 x BRS.
|
*Payouts are estimates based on CPF LIFE Standard Plan parameters in 2016.
#Available from January 2016
6% on 1st $30,000 from age 55 w.e.f. 1.1.2016
The interest rates from age 55 on the first $30,000 (effective 1 January 2016), next $30,000 and amount above $60,000 are 6, 5 and 4 per cent respectively.
Using the example of the Basic Retirement Sum (BRS) of $80,500 at age 55 with property pledge – the $80,500 will increase to about $132,937 at age 65.
Payouts until age 94 if under previous CPF withdrawal scheme?
Assuming an average monthly CPF Life payout of $690 ($660 – $720 divided by 2) – under the previous CPF withdrawal scheme – the money may run out after 29 years, i.e. after age 94.
So, does it mean that one has to live beyond 94 in order to be better off in this example, compared to the previous CPF withdrawal scheme (before CPF Life was implemented)?
CPF Life bequests?
Using the CPF Life Payout Estimator Calculator for a male age 55 now (date of birth 28.12.1960) the bequest at age 65, 75 and 85 are $83,418 – $83,505, $1,352 – $1,429 and 0 respectively.
In contrast, the estimated account balance (bequests) under the previous CPF withdrawal scheme are $132,937, $106,648 and $64,624 respectively.
The difference between the CPF Life bequests and the previous CPF withdrawal scheme account balances (bequests) is therefore $49,475 ($132,937 – $83,462), $105,257 ($106,648 – $1,391) and $64,624 ($64,624 – 0) respectively.
Leong Sze Hian
